KUALA LUMPUR (Reuters) – The Malaysian government has agreed to restructure the debts of state palm oil plantation agency Felda through the issuance of sukuk and revolving credit, the Finance Ministry said on Wednesday.
Prime Minister Anwar Ibrahim, who is also finance minister, has signed an agreement involving a government guarantee to Felda on the restructuring plan aimed at restoring the agency’s finances, the ministry said in a statement.
A large part of the restructuring plans will involve reducing Felda’s debt principal of 7.9 billion ringgit ($1.69 billion) with financial institutions, it said.
The plan will help reduce Felda’s costs against interest rates imposed and allow the agency to write off 80% of loans to farmers amounting to 8.3 billion ringgit.
Felda was set up to help palm oil farmers who work for the agency. It has a stake in FGV Holdings Bhd, the world’s largest crude palm oil producer.
($1 = 4.6670 ringgit)
(Reporting by Rozanna Latiff)
